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Municipal
Securities Rulemaking Board (MSRB) interpretive guidance adopted in
2012 established obligations for underwriters regarding the
information they must disclose to municipal securities issuers about the nature
of their relationship with the issuer and risks of transactions recommended,
among other information.
As
part of its ongoing review of its rules and published interpretations, the MSRB
is now seeking comment on this
guidance and is encouraging issuers to provide
feedback. The MSRB is an independent, self-regulatory organization for the
municipal securities industry whose mission is to protect investors, state and
local governments and the public interest. The MSRB does not regulate issuers
of municipal securities but is authorized by federal law to write rules with
respect to municipal brokers, dealers and advisors. MSRB rules establish
certain obligations that these types of financial professionals must follow
when working with state and local governments.
Comments received about underwriter disclosures will help the
MSRB identify any areas of potential market improvement or reduction of
unnecessary burdens on municipal bond issuers. These unnecessary burdens on the
issuing entity may include, but are not limited to, the volume and timing of
underwriter disclosures.
Comments should be submitted no later than August 6, 2018 and
may be submitted in electronic or paper form. Comments may be submitted
electronically by clicking here. Comments
submitted in paper form should be sent to Ronald W. Smith, Corporate Secretary,
Municipal Securities Rulemaking Board, 1300 I Street NW, Suite 1000,
Washington, DC 20005. All comments will be available for
public inspection on the MSRB's website.
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State and local governments rely on the municipal securities market to finance public projects for their citizens. Bond issuance, whether done once a decade or once a month, generally requires municipal governments to hire financial professionals to assist them. The MSRB’s Six Things to Know When Issuing Municipal Bonds document highlights important information for state and local governments considering issuing bonds.
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Although the municipal securities market comprises a wide range of bond issues each with their own structural characteristics, market indicators such as indices, benchmarks and yield curves can provide investors and issuers with valuable sector-specific or broad market information about the general level of municipal interest rates. Municipal securities issuers and investors may use these indicators to assist in the evaluation of a unique bond’s yield or its performance relative to a particular sector, or the market as a whole, as well as the interest-rate environment and the value of any single security.
The MSRB recently made additional yield curves from Bloomberg BVAL and IHS Markit available on the EMMA website. To explore yield curves and other municipal market tools, click on EMMA’s “Tools and Resources” tab. Visit the Electronic Municipal Market Access (EMMA®) website today to access more free tools for evaluating municipal market trends. To explore yield curves and other municipal market tools, click on EMMA’s “Tools and Resources” tab.
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In recent years, more municipal
securities have been issued through negotiated
sales
than competitive
sales.
It’s important for issuers and all municipal market participants to understand
the key components of each method of sale to be fully informed about the bond
issuance process.
Today,
competitive sales are growing in popularity while negotiated sales as a
percentage of all types of offerings are declining. According to MSRB data,
around 67.9 percent of all municipal bonds issued in the first half of 2018
were through negotiated sale, compared to 85.5 percent in 2008. The MSRB will
soon add two new courses to its MuniEdPro® catalog covering the fundamentals of
the negotiated and competitive sales and allow the learner to navigate
tax-exempt bond issuances through interactive examples.
MuniEdPro® is the MSRB’s suite of interactive, online courses designed specifically for municipal market participants. For more information, contact Ritta McLaughlin, Chief Education Officer, at rmclaughlin@msrb.org or 202-838-1306.
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It's Your Deal is a quarterly resource guide published by the MSRB to provide objective and useful information to state and local governments that issue municipal bonds. As part of its mission to protect municipal bond issuers, the MSRB regulates municipal advisors and municipal securities dealers, operates the Electronic Municipal Market Access (EMMA®) website, and offers free educational resources in the MSRB Education Center.
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